Use the information below to answer the following question(s).
A company makes table lamps, for which the following standards have been developed:
During January, production of 100 lamps was expected, but 110 lamps were actually completed.
Direct materials purchased and used were 2,100 kilograms at an actual price of $2.20 per kilogram.
Direct labour cost for the month was $5,310, and the actual pay per hour was $9.00.
-The direct-material price variance for January is
A) $420 unfavourable.
B) $420 favourable.
C) $400 favourable.
D) $400 unfavourable.
E) $20 favourable.

Question

Use the information below to answer the following question(s).
A company makes table lamps, for which the following standards have been developed:
  During January, production of 100 lamps was expected, but 110 lamps were actually completed.
Direct materials purchased and used were 2,100 kilograms at an actual price of $2.20 per kilogram.
Direct labour cost for the month was $5,310, and the actual pay per hour was $9.00.
-The direct-material price variance for January is
A) $420 unfavourable. 
B) $420 favourable. 
C) $400 favourable. 
D) $400 unfavourable. 
E) $20 favourable.

Quizplus · Accepted Answer

Direct-material price variance = (Actual price - Standard price) x Actual quantity purchased
= ($2.20 - $2.00) x 2,100 kg
= $220 unfavorable

The answer is A) $420 unfavourable, assuming it is a typo and the given answer was meant to read unfavourable.

Use the Information Below to Answer the Following Question(s)